Page 50 - SE Outlook Regions 2022

2.7.2 External environment

Montenegro’s current account gap decreased 71.1% y/y to €249.2mn in
the first nine months of 2021, according to data from the country’s
central bank. Exports went up 32.6% y/y to €371mn in
January-September, while imports increased 17% y/y to €1.8bn.

The net primary income account posted a €84mn surplus, jumping
34.7% y/y. Net secondary income increased 52.1% y/y to €281.6mn.
The services account surplus increased nearly six times y/y to
€796.8mn. The financial account turned to a €77.3mn surplus from a
deficit of €728.3mn a year ago. Net foreign direct investment was
-€352.2mn versus -€345.4mn a year earlier.

According to the International Monetary Fund (IMF), the country’s
current account deficit is seen falling to 21% of GDP in 2021 from 26%
a year ago. The gap is set to contract to 16.8% in 2022.

2.7.3 Inflation and monetary policy

In November 2021, Montenegro's consumer prices went up by an
annual 4.4%, after rising by 3.8% y/y in October, according to the latest
available statistics office data.

Transport costs increased the most in November, by 13.6% y/y,
followed by the food and non-alcoholic prices that increased by 5.5%
y/y and prices of hotels and restaurants, which were up by 5.1% y/y.

In the first eleven months of 2021, consumer prices were up by 2.2%
y/y.

The IMF has projected that Montenegro's consumer prices would rise
by 2.9% in 2021 and by 2.1% in 2022.

The country’s central bank forecast that inflation would be between 2%
and 4% by the end of 2021 with the most likely scenario being 3%
consumer price inflation.

The World Bank’s forecast is for inflation to reach 1.5% in 2021 and
hold at the same level in 2022.

50 SE Outlook 2022 www.intellinews.com